Home is where the money is: The economic importance of savings
Overview
New Zealand's household savings rates have consistently been amongst the lowest in the OECD. As a consequence, New Zealand is heavily reliant on foreign savings and is one of the most externally indebted countries in the developed world. This has real economic costs. The international evidence shows that, despite the globalisation of capital markets, domestic savings and domestic investment remain linked - and that, as a result, a low level of domestic savings is likely to constrain investment in the New Zealand economy. And New Zealand's high level of external debt leads to New Zealand borrowers paying significantly higher interest rates. The report argues that increasing household savings should be a national priority and that increased savings is likely to lead to higher rates of investment, productivity, and growth.> Executive summary (502kb PDF)
> Full report (992kb PDF)
